Marketing is about solving business problems. This can be done by building awareness, better understanding customer requirements, investing to generate revenue, and galvanizing employees. Over the last decade, marketers have made a shift of resources to focus on revenue generation. Program management, lead generation, search marketing, content creation, and database marketing are all aligned to drive revenue with the highest possible ROI.
What is Revenue Marketing?
So, what is revenue marketing? It is the development of repeatable prospecting programs aimed at driving sales and acquiring new customers. The key to revenue marketing is measurable results for a predictable return on investment. Revenue marketing as a discipline directly ties to new CRM tools as they help companies track the impact every dollar has on their bottom-line. CRM tools can also track leads generated by every campaign a business invests in and how many leads are turned into revenue-paying customers.
Established companies now use revenue marketing to drive their entire sales pipelines. They achieve this by nurturing inbound leads and convert them into buying customers. Instead of making cold calls, businesses now have a planning process that includes revenue goals and at-risk compensation built around them. The company then figures out the required marketing investments to bring the desired results.
Why Companies Should Adapt Revenue Marketing
The driving force for revenue marketing is accountability. Revenue accountability allows businesses to account for the impact marketing has on revenues. Keeping track of the revenue impact for each campaign allows a company to move forward and get a reasonable ROI. The overall aim still remains to achieve growth, a competitive edge, increased operational efficiency, and effectiveness in the marketing and sales process.
The demand to show credible financial outcomes is driving many B2B marketers to add direct revenue accountability to their job description. This is a period of extreme transformation, and Chief Marketing Officers (CMOs) have an obligation to meet the requirements of their organization. These include;
- Using pipelines to accelerate sales opportunities
- Delivering sales-ready leads to the top of the funnel
- Improving the ROI of sales
- Conducting measurable marketing based on predictable, replaceable and scalable revenue contributions
The Revenue Marketing Journey Model
The Pedowitz Group created The Revenue Marketing Journey (RMJ) to aid marketers to understand this new situation. This model was introduced in 2011, and since then, thousands of marketers have tested it and proven that it delivers results in a simple model that helps B2B marketers and CMOs determine where the company is and where they need to be. There are four stages within this model that businesses have to go through to achieve revenue-marketing status;
Stage 1: Traditional Marketing
This is the ‘Make It Pretty’ Department, and it is characterized by the Four P’s;
At this stage, marketing is a pure cost center, and marketers focus on product marketing, branding, public relations, and marketing communications. Traditional marketing is what most marketers do experience very often. At this stage, marketing doesn’t have a seat at the revenue table, and CMOs have not looked into the revenue impact that marketing can make on your company.
Traditional marketing mainly focuses on the creation and implementation of marketing strategies. This does not include leveraging insights that shed light on the impact of those campaigns. The metrics marketers report on are mainly activity-based, making these campaigns blind spends.
Organizations need to move beyond this stage and adopt effective and relevant ways of marketing. When marketers understand what they’re measuring, they get insights into where the business is headed.
Stage 2: Lead Generation
This is the first step in the right direction as it is the beginning of the shift from traditional marketing to revenue oriented marketing. This second stage involves marketers being responsible for providing leads to businesses. However, there is no provision as to what constitutes a qualified lead.
Many organizations have long-term lead-generation strategies, but in most cases, the leads they turn over aren’t properly developed because they are not sales-ready. Businesses invest in paid advertising, organic search, list purchases, and email marketing. The metrics used for email marketing include open rate, emails sent, and click through rate.
The email marketing strategy is usually one-dimensional, and once a marketer passes a lead to sales, their job is done. This stage is still viewed as a cost center because there is usually no follow up to ascertain that the leads passed to sales are qualified.
This is the stage where marketers begin to provide businesses with tangible marketing revenue contributions. Marketing and sales teams to push qualified leads to the top of the funnel.
Not many organizations have gotten to this stage and to get here, a business needs to integrate their Customer Relationship Management system with a marketing automation system.
In this stage, the metrics B2B marketers use include the percentage of conversion opportunity, the number of marketing qualified leads sent to sales and percentage contribution to the pipeline. These metrics are no longer activity-based but revenue-based.
Since marketers are more focused on quality rather than quantity, they hand over more qualified leads to the sales team. There is a positive co-dependence between sales and marketing teams that begins to develop.
This stage is characterized by processes which lead to foreseeable revenue contribution. Marketers can now account for the great contribution marketing will make.
This is the final stage where marketer provides sales teams with sales-ready leads, and opportunities are accelerated through the sales pipeline. The revenue a business generated can be attributed to marketing. A scalable, repeatable, and predictable marketing strategy is in place. This guarantees accountable revenue marketing.
Companies can report on what they did in the previous quarter and predict future contributions. Companies now view marketers as revenue investments and marketing as a revenue-oriented rather than a cost center.